Now that Britain has decided to leave the EU, the logistics sector must inevitably be wondering, what next? However, there is not a great deal to add to what has already been said in the lead up to the referendum. It may sound like stating the obvious, but the analysis before the event on the impact of Brexit on UK logistics still holds.
For instance, one of the various trade scenarios that have been outlined in the event of a Brexit will become more or less the reality that Britain faces down the line. For other impacts on the UK logistics sector, the analysis outlined in a previous article by Ti remains pertinent.
As for how long Britain will take to actually leave the EU, the same LSE paper which outlines the trade scenarios above states the following, “Formal procedures for leaving the EU were introduced by the Lisbon Treaty, which came into force in 2009. A country wishing to leave the EU must notify the EU of its intention and this notification would trigger negotiations over a withdrawal agreement between the country and the remainder of the EU. The country would officially exit the EU on the date the withdrawal agreement came into effect or, if no agreement is reached, the country could leave two years after the date of notification.”
Upon David Cameron’s resignation, it is clear that he will leave the task of triggering the start of exit negotiations (Article 50 of the Lisbon Treaty) to his successor. He has also asserted that he thinks Britain should have a new Prime Minister in place by the start of the Conservative conference in October.
One immediate impact of Brexit, correctly predicted by many analysts, is that the value of the pound has fallen (a boon for exporters, bad for importers) and that the FTSE 100 index lost ground. Further market volatility should be expected.
Overall though, it is obviously not clear what the UK’s relationship with the EU will be in future, nor the timetable for which such a relationship will be established. Perhaps the most used word in the coming weeks and months in the aftermath of Brexit will be ‘uncertainty’.
What is clear however is that the logistics sector will stand up to whatever challenges or opportunities Brexit throws at it. While Brexit will undoubtedly have an impact on many, the day-to-day issues firms face in the sector are no less relevant and should not be overshadowed.
Ti’s CEO, Prof John Manners-Bell commented: “I think the over-riding message for the European logistics and supply chain industry is one of ‘business as usual’. It will be several years before the UK’s settlement with the EU will be agreed and it will be in everyone’s interest to ensure that there is as little disruption to the movement of goods throughout the region as possible. For UK manufacturers there is the eventual prospect of enhanced links with many of the world’s fastest growing economies such as China and India. However, deals will take some time to put in place and for the time being, at any rate, we don’t envision any changes to the UK’s position in world trade.”
Source: Transport Intelligence, June 24, 2016
Author: David Buckby
